EXHIBIT 26-C
P R O P O S A L
for the purchase of
$--------(1) Principal Amount of Senior Notes
---% Series1 due -----------(1)
of
METROPOLITAN EDISON COMPANY
------------------
Interest Rate:----- % per annum
Price: ----% of principal amount
Metropolitan Edison Company
c/o GPU Service, Inc.
310 Madison Avenue
Morristown, New Jersey 07962
Ladies and Gentlemen:
Referring to the Statement of Terms and Conditions Relating to
Proposals dated -------------- ("Terms and Conditions") for the purchase of not
more than $---------- aggregate principal amount of the above series of Senior
Notes of Metropolitan Edison Company ("Company"), the persons, firms and
corporations named in Schedule A attached hereto ("Prospective Purchasers")
submit herewith the following Proposal for the above series of Senior Notes of
the Company ("Notes"):
1. Each of the Prospective Purchasers, severally and not jointly,
hereby offers to purchase from the Company, at the price (expressed as a
percentage of the principal amount of the Notes) and with an interest rate to be
paid by the Company as specified in the space provided therefor above, and upon
the terms and conditions set forth in the Terms and Conditions, including the
statement(s) relating to the Notes furnished to the Prospective Purchasers by
the Company pursuant to Section 1(g) thereof, and in the form of Purchase
Agreement attached hereto as Schedule B (the "Purchase Agreement"), the
principal amount of Notes set forth opposite the name of such Prospective
Purchaser in said Schedule A (unless corrected or deemed to have been
- --------
(1) Insert the principal amount, the series designation and the year of
maturity of the notes designated by the Company pursuant to Section 1 of the
Terms and Conditions.
corrected as provided in Section 2 of the Terms and Conditions, in which case
said principal amount shall be as so corrected or deemed to have been
corrected).
2. If this Proposal shall be accepted by the Company, the Purchase
Agreement shall thereupon become effective as of the time of the acceptance of
this Proposal without any separate execution thereof, with the blanks therein
deemed to be appropriately filled in, in accordance with the terms of this
Proposal, and with such modifications therein as may be necessary and as are
contemplated by the Terms and Conditions.
3. This Proposal is independent of all other proposals which may be
presented to the Company pursuant to the Terms and Conditions.
4. Each of the Prospective Purchasers acknowledges receipt of a copy
of the Terms and Conditions and the Prospectus relating to the Notes.
5. By making this Proposal each of the Prospective Purchasers
confirms its representations to the Company as set forth in Section 3 of the
Terms and Conditions.
The undersigned Representative represents and warrants that it has
all necessary power and authority to submit proposals for each of the
Prospective Purchasers in respect of the matters referred to in this Proposal
and to act on behalf of each of the Prospective Purchasers in any purchase of
the Notes if this Proposal is accepted as contemplated by the Terms and
Conditions.
Please indicate your acceptance of this Proposal by signing below or
on a counterpart hereof, in which event each such counterpart shall be deemed to
be an original but both of which, when taken together, shall constitute one and
the same document.
Very truly yours,
Representative(s)
By:
-------------------------------------
Acting on behalf of the several
Prospective Purchasers named in Schedule
A attached hereto, including itself; or
single prospective purchaser.
Accepted ------------, 1999
METROPOLITAN EDISON COMPANY
By:
Title:
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SCHEDULE A
----------
Name of
Prospective Purchaser Principal Amount
--------------------- ----------------
---------
Total............................................$
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SCHEDULE B
METROPOLITAN EDISON COMPANY
SENIOR NOTES
PURCHASE AGREEMENT
AGREEMENT made as of the date of acceptance of the proposal (which
includes Schedule A thereto) to which this Agreement is attached as Schedule B
("Proposal"), between Metropolitan Edison Company, a Pennsylvania corporation
("Company"), and the several Purchasers (hereinafter defined) of the Company's
Senior Notes of the designated series, in the principal amount and with the
interest rate specified in the Proposal ("Notes").
Section 1. Registration and Issue of Notes. (a) The Company proposes
to issue the Notes under its Senior Note Indenture between the Company and
United States Trust Company of New York, as Trustee ("Trustee"), as supplemented
by a supplemental indenture between the Company and the Trustee (said Indenture,
as so supplemented, being hereinafter referred to as the "Indenture" and such
supplemental indenture, as executed and delivered, being hereinafter referred to
as the "Supplemental Indenture"), which Notes and Indenture are more fully
described in the prospectus hereinafter referred to.
(b) The Company represents and warrants that it has duly filed
with the Securities and Exchange Commission ("SEC") a registration statement on
Form S-3 relating to up to $250 million aggregate principal amount of the Notes
and the offering thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended ("1933 Act"), and has filed such amendments
thereto, if any, and such amended preliminary prospectus as may have been
required to the date hereof. Such registration statement as so amended has been
declared effective by the SEC. Copies of such registration statement have been
delivered to the Representative hereinafter referred to, and copies of a
prospectus supplement ("Prospectus Supplement") or prospectus filed pursuant to
Rule 424(b) under the 1933 Act satisfactory to counsel for the Purchasers
reflecting the terms of the Notes will similarly be delivered. The Company will
not file any amendment to said registration statement, any prospectus supplement
or any documents with the SEC pursuant to Sections 13, 14 or 15 of the
Securities Exchange Act of 1934, as amended ("1934 Act"), which modify said
registration statement, unless such amendment, supplement or modification is
reasonably satisfactory to counsel for the Purchasers. Such registration
statement as so amended on the date of this Agreement, and the prospectus
constituting a part thereof, as amended or supplemented to reflect the terms of
the offering of the Notes pursuant to a prospectus supplement or prospectus
filed by the Company pursuant to Rule 424(b) under the 1933 Act (including, in
each case, all documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the 1933 Act), are hereinafter called the "Registration
Statement" and the "Prospectus", respectively, except that if the Company files
any documents pursuant to Sections 13, 14 or 15 of the 1934 Act after the date
of this Agreement and prior to the termination of the offering of the Notes by
the Purchasers, which documents are deemed to be incorporated by reference in
the Prospectus, the term "Prospectus" shall refer to the Prospectus as
supplemented by the documents so filed from and after the date said documents
are mailed or otherwise delivered for filing to the SEC. The Company will advise
Thelen Reid & Priest LLP, who are acting as counsel for the Purchasers, of the
filing of any amendment or supplement to the Prospectus (including any documents
incorporated by reference), prior to any such filing and will not file any such
amendment or supplement to which counsel for the Purchasers shall reasonably
object in writing.
Section 2. Purchase and Sale. Subject to the terms and conditions
herein set forth, the Company agrees to sell to the several persons, firms or
corporations named in the Proposal (herein referred to as "Purchasers" or singly
as "Purchaser" and the Purchaser or Purchasers named as Representative(s) in the
Proposal being herein referred to as "Representative"), severally and not
jointly, and each of the Purchasers, upon the basis of the representations and
warranties herein set forth, agrees to purchase from the Company, severally and
not jointly, the principal amount of Notes set forth opposite its name in the
Proposal at the price set forth in the Proposal plus accrued interest thereon
from the first day of the month in which the Notes are to be issued, to the date
of delivery of and payment for the Notes.
Section 3. Public Offering. The Company is advised by the
Representative that the Purchasers propose to make a bona fide public offering
of the Notes as soon as practicable. The Representative is contemporaneously
advising the Company of such details of the offering, including the price to the
public and the concessions, if any, to dealers, brokers and others, as are
needed to complete the filing of any supplement to the Prospectus.
Section 4. Delivery of and Payment for the Notes. (a) Payment of the
purchase price for the Notes, including accrued interest at the rate specified
in the Proposal from the first day of the month in which the Notes are issued to
the Closing Date (as herein below defined), shall be made by or on behalf of the
several Purchasers by a check or checks payable in Federal funds or wire
transfer to the order of the Company, at the offices of Thelen Reid & Priest
LLP, 40 West 57th Street, New
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York, New York 10019 (or such other place or places of payment as
may be agreed upon between the Company and the Representative), at 10:00 A.M.,
New York time, on the date which is [three business days] after the date on
which the Proposal is accepted by the Company, or at such other time and by such
alternative method as shall be agreed upon by the Company and the
Representative, upon delivery of the Notes to the Representative for the account
of the Purchasers at the offices of Thelen Reid & Priest LLP, 40 West 57th
Street, New York, New York 10019 (or such other place or places of delivery as
shall be agreed upon between the Company and the Representative). The
consummation and the time and date of such payment and delivery, which may be
postponed as provided in paragraph (c) below, are herein referred to,
respectively, as the "Closing" and the "Closing Date."
(b) The Notes will be delivered to the Representative for the
respective accounts of the Purchasers in fully registered form in denominations
of $1,000 and any integral multiple thereof as the Representative may reasonably
request in writing not later than 12:00 Noon, New York time, on the second
business day prior to the Closing Date, or to the extent not so requested,
registered in the names of the respective Purchasers in such denominations as
the Company may determine. The Company agrees to make such Notes available to
the Representative for inspection not later than 12:00 Noon, New York time, on
the business day next preceding the Closing Date at the offices of Thelen Reid &
Priest LLP, 40 West 57th Street, New York, New York 10019 (or such other place
or places as shall be agreed upon between the Company and the Representative).
(c) If any one or more of the Purchasers shall fail or refuse
to purchase and pay for the principal amount of Notes set forth opposite its or
their names in the Proposal in accordance with the terms hereof ("Defaulted
Notes"), the Company shall immediately notify the Representative orally, and the
Representative shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Purchasers, or any other
purchasers, to purchase all, but not less than all, of the Defaulted Notes in
such amounts as may be agreed upon and upon the terms herein set forth. If,
however, during such 24 hours the Representative shall not have completed such
arrangements for the purchase of all of the Defaulted Notes, then the Company
shall have the right within a further period of 24 hours:
(i) to require each non-defaulting Purchaser to purchase the
Defaulted Notes of the defaulting Purchaser up to a principal amount
thereof equal to 10% of the principal amount of Notes which such
non-defaulting Purchaser has otherwise agreed to purchase hereunder;
and
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(ii) to procure one or more other members of the National
Association of Securities Dealers, Inc., satisfactory to the
Representative, to purchase, upon the terms herein set forth, the
aggregate amount of Defaulted Notes which the non-defaulting
Purchasers shall not be obligated to purchase pursuant to the
foregoing clause (i).
In the event of a default by any Purchaser or Purchasers as
set forth in this Section, either the Representative or the Company shall have
the right to postpone the Closing Date for a period not exceeding seven days in
order that any required changes in the Registration Statement or Prospectus or
in any other documents or arrangements may be effected.
Section 5. Conditions of Purchasers' Obligations. The obligations of
the several Purchasers to purchase and pay for the Notes are subject to the
following conditions:
(a) Any prospectus or prospectus supplement required to be
filed pursuant to Rule 424(b) under the 1933 Act to reflect the terms of the
Proposal shall have been timely filed in accordance with the 1933 Act.
(b) On the Closing Date there shall be in full force and
effect an order of the Pennsylvania Public Utility Commission ("PaPUC")
permitting the issuance and sale of the Notes, containing no provision
unacceptable to the Representative (it being understood that any such order in
effect as of the date of this Agreement does not contain any such unacceptable
provision and that no subsequent order shall be deemed to contain any such
unacceptable provision, unless the Representative within 24 hours after
receiving a copy thereof from the Company shall have given notice to the Company
to the effect that such order contains an unacceptable provision or unacceptable
provisions).
(c) On the Closing Date
(i) no stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceedings for
that purpose shall be pending before, or to the knowledge of the
Company threatened by, the SEC;
(ii) since the respective most recent dates as of which
information is given in the Registration Statement and Prospectus
and up to the Closing Date, there shall have been no material
adverse change in the business, properties or financial condition of
the Company, except as reflected in or contemplated by the
Registration Statement and the Prospectus, and since such dates and
up to the Closing Date there shall have
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been no material transaction entered into by the Company other than
transactions disclosed in or contemplated by the Registration
Statement and the Prospectus and transactions in the ordinary course
of business;
(iii) the Company shall have performed all agreements
contained herein to be performed by it at or prior to such date; and
(iv) the representations and warranties of the Company herein
contained shall be true and correct; and the Representative shall
have received, prior to payment for the Notes, a certificate, dated
the day of the Closing Date and signed by the President or any Vice
President of the Company, to such effect.
(d) On the Closing Date, the Representative shall be furnished
with opinions of Berlack, Israels & Liberman LLP and Ryan, Russell, Ogden &
Seltzer LLP (together, herein sometimes referred to as "counsel for the
Company"), dated the Closing Date and with copies thereof for each of the other
Purchasers, to the effect that:
(i) the Company is duly incorporated and validly
subsisting under the laws of the Commonwealth of
Pennsylvania and has corporate authority to carry on its
business as described in the Prospectus, to own and
operate the properties used and useful in said business
and to issue the Notes under and pursuant to the
Indenture;
(ii) the Indenture has been duly authorized,
executed and delivered by the Company and is a valid
instrument legally binding upon the Company (except as
limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other laws,
including, without limitation, the Atomic Energy Act of
1954 and the regulations thereunder, affecting
creditors' rights generally and general equitable
principles);
(iii) when the Notes have been duly executed by
the Company, authenticated by the Trustee and delivered
by the Company, and payment therefor has been received
by the Company pursuant to this Agreement, they will be
valid and binding obligations of the Company in
accordance with their terms and entitled to the benefits
provided by the
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Indenture, subject to the limitation set forth in
item (ii);
(iv) the Notes conform as to legal matters to the
statements concerning them in the Prospectus, and the
summary therein of certain provisions of the Indenture
constitutes a correct summary thereof for use in the
Prospectus;
(v) the franchises of the Company are
sufficient authority for it to carry on its business
as described in the Prospectus;
(vi) all approvals, consents, and orders of the
PaPUC and the SEC legally required for the execution and
delivery of the Supplemental Indenture and the issuance
and sale of the Notes have been obtained, and no
approval or consent of any other commission or other
governmental authority is legally required for such
execution, delivery, issuance and sale (except that the
sale of the Notes in certain jurisdictions may be
subject to the provisions of the securities laws of such
jurisdictions) and the issuance and sale of the Notes
are in accordance with the approvals and consents
obtained;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
(viii) at the time the Registration Statement
became effective, and as of the date hereof, the
Registration Statement and Prospectus (except the
financial statements and other financial and statistical
information included or incorporated by reference
therein, as to which counsel need express no opinion)
complied as to form in all material respects with the
requirements of the 1933 Act and the rules and
regulations of the SEC regarding registration statements
on Form S-3 and related prospectuses; and
(ix) with respect to matters required to be
included in the Registration Statement, the statements
made in the Registration Statement under the heading
"Description of Senior Notes" fairly present the
information called for insofar as such statements
constitute summaries of certain documents referred to
therein.
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In addition, such counsel shall state that to the best of such counsel's
knowledge, without independent check or verification except as indicated,
nothing has come to the attention of such counsel that would lead them to
believe that the Registration Statement at the time it became effective, or if
an annual report on Form 10-K has been filed by the Company with the SEC
subsequent to the effectiveness of the Registration Statement, then at the time
of the most recent such filing (in each case other than with respect to the
financial statements and other financial and statistical information included or
incorporated by reference therein), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the Prospectus,
at the time it was electronically transmitted to the SEC or at the Closing Date
(other than with respect to the financial statements and other financial and
statistical information included or incorporated by reference therein),
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In giving such opinion, Berlack, Israels & Liberman LLP may rely as to all
matters of Pennsylvania law and legal conclusions based thereon upon the opinion
of Ryan, Russell, Ogden & Seltzer, LLP.
(e) On the Closing Date, the Representative shall be furnished
with an opinion of Thelen Reid & Priest LLP (herein sometimes referred to as
"counsel for the Purchasers"), dated the Closing Date, and with copies thereof
for each of the other Purchasers, stating in substance the matters set forth in
subparagraphs (ii), (iii), (iv), (vi), (vii), (ix) and the penultimate paragraph
of paragraph (d) of this Section 5; and stating that the opinion given pursuant
to paragraph (d) of this Section 5 is satisfactory in form to them. In giving
such opinion, counsel for the Purchasers may rely as to all matters of
Pennsylvania law and legal conclusions based thereon upon the opinion of Ryan,
Russell, Ogden & Seltzer, LLP, Reading, Pennsylvania.
(f) On the Closing Date, the Representative shall be furnished
with a letter from PricewaterhouseCoopers, LLP, dated such date and addressed to
the Board of Directors of the Company and the Representative, with copies
thereof for each of the Purchasers, to the effect that: (i) they are independent
certified public accountants with respect to the Company within the meaning of
the 1933 Act and the applicable published rules and regulations thereunder; (ii)
in their opinion, the financial statements and supplemental schedules audited by
them and incorporated by reference in the Prospectus and included or
incorporated by reference in the Company's most recent Annual Report on Form
10-K filed with the SEC under Section 13 of the
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1934 Act ("Form 10-K") comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the published rules and
regulations thereunder ("1934 Act Regulations"); (iii) on the basis of (1)
procedures performed as specified by the American Institute of Certified Public
Accountants for a review of interim financial information as described in SAS
No. 71, Interim Financial Information, on the unaudited balance sheets and
related unaudited condensed statements of income, retained earnings and cash
flows of the Company incorporated by reference in the Registration Statement and
included in the Company's quarterly reports on Form 10-Q (collectively, "Form
10-Qs"), (2) a reading of the latest unaudited Operating Revenues and Net Income
included or incorporated by reference in the Prospectus, (3) a reading of the
latest available unaudited financial statements of the Company, (4) a reading of
the minutes of the meetings of the stockholder, the Board of Directors and the
Executive Committee of the Board of Directors of the Company as set forth in the
minute books since [September 30, 1998], and (5) inquiries of certain officials
of the Company who have responsibility for financial and accounting matters (it
being understood that the foregoing procedures do not constitute an audit made
in accordance with generally accepted auditing standards and would not
necessarily reveal matters of significance with respect to the comments made in
such letter and, accordingly, that PricewaterhouseCoopers, LLP makes no
representations as to the sufficiency of such procedures for the several
Purchasers' purposes), nothing has come to their attention which caused them to
believe that (A) the unaudited financial statements included in the Form 10-Qs
do not comply as to form in all material respects with the applicable accounting
requirements of the 1934 Act and the 1934 Act Regulations or that any material
modifications should be made to said unaudited financial statements for them to
be in conformity with generally accepted accounting principles, (B) any material
modifications should be made to the unaudited amounts of operating revenues and
net income for the most recent 12-month period included or incorporated by
reference in the Registration Statement for them to be in conformity with
generally accepted accounting principles or (C) on the date of the latest
available financial statements and on a specified date not more than five days
prior to the Closing Date there was any change in the common stock, preferred
stock without mandatory redemption, company-obligated mandatorily redeemable
preferred securities, preferred stock with mandatory redemption or long-term
debt (except for such stock and long-term debt acquired for sinking fund
purposes or redeemed pursuant to sinking fund provisions, or changes in
obligations under capital leases incurred in the ordinary course of the
Company's business), of the Company, or any decrease in its net assets (except
as occasioned by the declaration of dividends), in each case as compared with
the amounts shown in the most recent balance sheet included in the most recent
Form 10-K or Form 10-Q, except in all instances for changes or decreases which
the
8
Registration Statement discloses have occurred or may occur, and (iv) they have
proved the arithmetic accuracy of or performed certain other procedures on the
Ratios of Earnings to Fixed Charges contained in the Registration Statement
under the heading "Company Coverage Ratios" and such other financial information
contained or incorporated by reference in the Registration Statement as
reasonably requested by the Representative; provided, that said letter may vary
from the requirements specified above in such manner as the Representative may
deem not to be material or may be acceptable to the Representative with the
consent of Purchasers who, together with the Representative, have agreed to
purchase in the aggregate 50% or more of the Notes.
Section 6. Conditions of Company's Obligations. The obligations of
the Company to issue and sell the Notes are subject to the following conditions:
(a) Any prospectus or prospectus supplement pursuant to Rule 424(b)
under the 1933 Act shall have been filed not later than the time specified in or
agreed to under paragraph (a) of Section 5 hereof.
(b) On the Closing Date no stop order suspending the effectiveness
of the Registration Statement shall be in effect and no proceedings for that
purpose shall be pending before or, to the knowledge of the Company, threatened
by the SEC.
(c) On the Closing Date there shall be in full force and effect an
order of the PaPUC permitting the issuance and sale of the Notes in accordance
with the terms thereof containing no provision unacceptable to the Company (it
being understood that any such order in effect as of the date of this Agreement
does not contain any such unacceptable provision and that no subsequent order
shall be deemed to contain any such unacceptable provision, unless the Company,
within 24 hours after receiving a copy thereof, shall give notice to the
Representative to the effect that such order contains an unacceptable provision
or unacceptable provisions).
(d) On the Closing Date the Company shall concurrently sell and
receive payment for all of the Notes.
(e) The issuance and sale of the Notes shall be exempt from the
provisions of the Public Utility Holding Company Act of 1935, as amended,
pursuant to Rule 52 thereunder.
Section 7. Covenants of the Company. In further consideration of the
agreements of the Purchasers herein contained, the Company agrees that:
(a) The Company will file with the SEC a prospectus or prospectus
supplement pursuant to Rule 424(b) under the 1933 Act,
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with such changes therein as may be approved by counsel for the Purchasers, as
soon as practicable after the acceptance of the Proposal.
(b) As soon as the Company is advised thereof, it will notify the
Representative orally (i) when any amendment or supplement to the Registration
Statement has been filed, and (ii) when any stop order has been issued under the
1933 Act with respect to the Registration Statement or any proceedings therefor
have been instituted or to the knowledge of the Company are threatened; and it
will use its best efforts to prevent the issuance of any such stop order and
secure the prompt removal thereof, if issued. The Company will not, after the
acceptance of the Proposal and prior to termination of the offering of the
Notes, file any amendment of or any further supplement to the Registration
Statement or the Prospectus unless such amendment or supplement is reasonably
satisfactory to counsel for the Purchasers.
(c) The Company will, on or prior to the Closing Date, deliver to
the Representative and also, on request, to counsel for the Purchasers:
(i) a copy of the Registration Statement as originally filed
and of each amendment thereto, each signed by or on behalf of the
proper officers of the Company and a majority of its Board of
Directors, including a signed copy of each consent, opinion and
certificate included therein or filed as an exhibit thereto, and
also including the exhibits to, and the documents incorporated by
reference in, such Registration Statement and amendments thereto
(other than such exhibits as are incorporated in the Registration
Statement by reference, unless specifically requested); and
(ii) such other documents (including copies of the
Registration Statement and of any amendments thereto, in each case
including documents incorporated therein by reference but excluding
exhibits) appropriately signed or certified if so requested,
relating to the issuance and validity of the Notes as the
Representative or counsel for the Purchasers may reasonably request.
(d) Promptly after the date of any prospectus supplement or
prospectus filed with the SEC to reflect the terms of the Proposal, the Company
will furnish to the Purchasers, in accordance with the Representative's
instructions, without charge, as many copies of the Prospectus (without the
documents incorporated therein by reference) as the Representative may
reasonably request for the purposes contemplated by the 1933 Act, and will
deliver to the Representative as soon as practicable
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after the effective date of the Registration Statement sufficient conformed
copies of the Registration Statement and of all amendments thereto (in each case
including documents incorporated therein by reference but excluding exhibits)
for distribution of one to each Purchaser. If any event relating to or affecting
the Company, or of which the Company shall be advised by the Representative,
shall occur, which in the opinion of the Company or of counsel for the
Purchasers should be set forth in a supplement to or an amendment of the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances when it is delivered to a Purchaser, the Company will, upon the
occurrence of each such event, forthwith at its expense, (i) prepare and furnish
to the Representative a reasonable number of copies of a supplement or amendment
to the Prospectus, satisfactory to counsel for the Purchasers, or (ii) file with
the SEC documents to be incorporated by reference in the Prospectus, reasonably
satisfactory to counsel for the Purchasers in either case so that statements in
the Prospectus as so supplemented, amended or modified will not contain as of
the date of such supplement, amendment or modification, any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances when the Prospectus is
delivered, not misleading.
(e) After the acceptance of the Proposal, and prior to the
termination of the offering of the Notes, the Company will file promptly all
documents required to be filed with the SEC pursuant to Section 13(a), 13(c), 14
or 15(d) of the 1934 Act, which documents shall be reasonably satisfactory to
counsel for the Purchasers.
(f) The Company will make generally available to its security
holders, as soon as practicable, an earning statement of the Company (covering a
period and otherwise in form consistent with the provisions of Section 11(a) and
Rule 158 promulgated under the 1933 Act which earning statement need not be
certified by independent public accountants unless required by the 1933 Act),
which earning statement shall be in the same detail as the Statement of Income
incorporated by reference in the Registration Statement.
(g) The Company will use its best efforts to comply with the
conditions precedent to the obligations of the Purchasers, specified in Section
5 hereof, or to cause such conditions to be complied with.
(h) The Company will pay all expenses in connection with the
preparation of the Registration Statement and Prospectus, the issuance and
delivery of the Notes, and the printing and delivery of copies of the
Registration Statement, the Prospectus, the Terms and Conditions and the various
documents therein referred to; and will pay all taxes, if any, on the issuance
of the Notes, but will not pay any transfer taxes.
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The Company will not, however, be required to pay any amount for any expenses of
the Representative or of any of the Purchasers or compensation and disbursements
of their counsel, except as provided in Section 9(c) hereof, and, except as
provided in said Section 9(c), the Purchasers agree to pay such expenses,
compensation and disbursements. The Company shall not, in any event, be liable
to the several Purchasers for damages on account of loss of anticipated profits.
(i) The Company will use its best efforts to qualify at its expense
the Notes for offer and sale, under the securities laws in such states as the
Representative may designate, and will pay all fees and expenses including fees
and disbursements of counsel not to exceed $_____ incurred in connection with
the preparation of surveys relating thereto and to their legality for
investment, if any, provided that the Company shall not be required to qualify
as a foreign corporation or to file a general consent to service of process in
any state.
Section 8. Representations and Warranties of the Company;
Indemnification. (a) The Company represents and warrants to each Purchaser
that
(i) when any prospectus or prospectus supplement reflecting
the acceptance of the Proposal is filed with the SEC, and at the
Closing Date, (A) the Registration Statement will comply in all
material respects with the provisions of the 1933 Act and the rules
and regulations of the SEC thereunder, and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (B) the Prospectus will comply in all
material respects with the provisions of the 1933 Act and the rules
and regulations of the SEC thereunder and will not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; except
that the representations and warranties contained in this subsection
(i) shall not apply to statements in or omissions from the
Registration Statement and Prospectus made in reliance upon and in
conformity with information furnished herein or in writing to the
Company by any Purchaser or by the Representative on behalf of any
Purchaser expressly for use in the Registration Statement or
Prospectus;
(ii) the documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time they
were filed with the SEC, complied in all material respects with the
requirements of the 1934 Act Regulations, and, when read together
with the other information in the Prospectus, and, when
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any prospectus or prospectus supplement reflecting the acceptance of
the Proposal is filed with the SEC, and at the Closing Date, will
not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they are made, not misleading, and any documents deemed to be
incorporated by reference in the Prospectus will, when they are
filed with the SEC, comply in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations and will
not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they are made, not misleading;
(iii) PricewaterhouseCoopers, LLP are independent certified
public accountants with respect to the Company within the meaning of
the 1933 Act and the rules and regulations of the SEC thereunder;
(iv) the performance by the Company of the terms of this
Agreement will not result in a breach by the Company of any terms
of, or constitute a default under, any other material agreement or
undertaking of the Company; and
(v) except as reflected in, or contemplated by, the
Registration Statement and Prospectus, since the respective most
recent dates as of which information is given in the Registration
Statement and Prospectus, there has not been any material adverse
change in the business, properties or financial condition of the
Company, and since such dates there has not been any material
transaction entered into by the Company other than transactions
disclosed in or contemplated by the Registration Statement and
Prospectus and transactions in the ordinary course of business, and
the Company has no material contingent obligation which is not
disclosed in the Registration Statement and Prospectus.
(b) The Company agrees to indemnify and hold harmless each Purchaser
and each person, if any, who controls any Purchaser within the meaning of
Section 15 of the 1933 Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the omission or alleged
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omission therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading, unless such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with written information furnished to the
Company by any Purchaser or by the Representative on behalf of any
Purchaser expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus
(or any amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and
expense whatsoever to the extent of the aggregate amount paid in
settlement of any litigation, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission or
any alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever reasonably
incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is
not paid under (i) or (ii) above.
This indemnity agreement is subject to the condition that insofar as
it relates to any untrue statement or omission, or any alleged untrue statement
or omission, made in any preliminary prospectus or the Prospectus but eliminated
or remedied in a supplement or amendment thereto, such indemnity agreement shall
not inure to the benefit of any Purchaser (or of any person controlling such
Purchaser) from and after the time such supplement or amendment shall have been
furnished unless the Prospectus is used as so supplemented or amended, provided
that such use shall not require delivery of documents incorporated by reference.
In no case shall the Company be liable under this indemnity agreement with
respect to any claim made against any Purchaser or any such controlling person
unless the Company shall be notified in writing of the nature of the claim
promptly after the assertion thereof, but failure so to notify the Company shall
not relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. The Company shall
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be entitled to participate at its own expense in the defense, or, if it so
elects within a reasonable time after receipt of such notice, to assume the
defense of any suit brought to enforce any such claim, but if it so elects to
assume the defense, such defense shall be conducted by counsel chosen by it and
approved by the Purchaser or Purchasers or controlling person or persons,
defendant or defendants in any suit so brought, which approval shall not be
unreasonably withheld. In the event that the Company elects to assume the
defense of any such suit and retains such counsel, the Purchaser or Purchasers
or controlling person or persons, defendant or defendants in the suit, shall
bear the fees and expenses of any additional counsel thereafter retained by
them. In the event that the parties to any such action (including impleaded
parties) include both the Company and one or more Purchasers and any such
Purchaser shall have been advised by counsel chosen by it and satisfactory to
the Company that there may be one or more legal defenses available to it which
are different from or additional to those available to the Company, the Company
shall not have the right to assume the defense of such action on behalf of such
Purchaser and will reimburse such Purchaser and any person controlling such
Purchaser as aforesaid for the reasonable fees and expenses of any counsel
retained by them, it being understood that the Company shall not, in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys for all such Purchasers and controlling persons, which firm will be
designated in writing by the Representative. The Company agrees to notify the
Representative promptly after the assertion of any claim against it, any of its
directors or any of its officers who signed the Registration Statement, or any
person who controls the Company within the meaning of Section 15 of the 1933
Act, in connection with the sale of the Notes.
(c) Each Purchaser severally agrees that it will indemnify and hold
harmless the Company, its directors, and each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act to the same extent as the indemnity
contained in subsection (b) of this Section, but only with respect to statements
or omissions made in the Registration Statement (or any amendment thereto) or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Purchaser or by the Representative on behalf of such
Purchaser expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto). In case any action shall be brought against the Company or
any person so indemnified based on the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
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supplement thereto) and in respect of which indemnity may be sought against any
Purchaser, such Purchaser shall have the rights and duties given to the Company,
and the Company and each person so indemnified shall have the rights and duties
given to the Purchasers by the provisions of subsection (b) of this Section.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Section 8 is
for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company and the Purchasers shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Company and
one or more Purchasers in respect of such offering in such proportions that the
Purchasers shall be responsible for that portion of the aggregate losses,
liabilities, claims, damages and expenses represented by the percentage that the
underwriting discount appearing on the cover page of the Prospectus Supplement
relating to the Notes bears to the initial public offering price appearing
thereon and the Company shall be responsible for the balance, provided, however,
that no such person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section, each person, if any, who controls a Purchaser within the meaning
of Section 15 of the 1933 Act shall have the same rights to contribution as such
Purchaser and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Company.
(e) The indemnity agreements contained in this Section 8 shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of the Company, or any Purchaser or any controlling person,
and shall survive the delivery of the Notes to the Purchasers.
Section 9. Termination and Survival. (a) This Agreement may be
terminated by notice to the Company by the Representative with the consent of
Purchasers who have agreed to purchase in the aggregate 50% or more of the
aggregate principal amount of the Notes (i) at any time prior to the expiration
of 24 hours after acceptance of the Proposal (but not after the initial public
offering of the Notes), if the market value of securities in general or
political, financial or economic conditions shall have so materially changed
after the time for the submission of proposals for the Notes and within the time
set forth above as, in the judgment of the Representative, to render it
inadvisable to proceed with the public offering of the Notes, and (ii) at any
time prior to the Closing if, subsequent to the time for the
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submission of proposals (A) a general banking moratorium shall have been
declared by Federal authorities which in the judgment of the Representative
would materially restrict a free market for the Notes, (B) there shall have been
a general suspension of trading on the New York Stock Exchange, (C) there shall
have occurred any new outbreak or escalation of hostilities or other national or
international calamity or crisis the effect of which on the financial markets of
the United States shall be such as, in the judgment of the Representative, to
make it impracticable for the Purchasers to enforce contracts for the sale of
the Notes, or (D) the Company shall have sustained a loss by fire, flood,
accident or other calamity which is substantial with respect to the property of
the Company and which in the judgment of the Representative renders it
inadvisable to consummate the sale of the Notes and the delivery of the Notes by
the several Purchasers at the initial public offering price, whether or not such
loss shall have been insured. The time of the initial public offering for the
purposes of this Section 9 shall mean the time at which the Notes are first
generally offered by the Representative on behalf of the Purchasers to dealers
by letter, facsimile transmission or telegram.
(b) This Agreement shall terminate:
(i) if, under the conditions, within the time and otherwise as
provided in Section 4(c) hereof, neither the Representative nor the
Company shall procure another party or parties to purchase Defaulted
Notes;
(ii) if any of the conditions specified in Section 5 hereof
shall not have been fulfilled and the Representative shall give
notice to the Company that this Agreement is terminated by reason
thereof; or
(iii) if any of the conditions specified in Section 6 hereof
shall not have been fulfilled and the Company shall give notice to
the Representative that this Agreement is terminated by reason
thereof.
(c) Subject to the provisions of paragraph (d) below, in the event
that this Agreement shall terminate as provided in paragraph (a) or (b) above,
no Purchaser (other than a Purchaser who shall have failed or refused to
purchase the Notes which it has agreed to purchase hereunder without some reason
sufficient to justify its termination of its obligations hereunder) shall be
under any liability to the Company, and the Company shall not be under any
liability to any Purchaser, except that the Company shall, unless such
termination shall be under the provisions of paragraph (a) or (b)(i) above, pay
the Representative, for the account of the Purchasers severally, the amount of
their out-of-pocket expenses (but not exceeding $---------- in the aggregate in
addition to the fee and disbursements of counsel for the Purchasers, a statement
of the amount of such fee and estimate of such disbursements having been
furnished to the Company)
17
reasonably incurred by the Purchasers hereunder, except for those Purchasers who
have failed or refused (without some reason sufficient to justify the
termination of their obligations hereunder) to purchase and pay for the Notes
which such Purchasers have agreed to purchase hereunder. The Company will not in
any event be liable to any of the several Purchasers for damages on account of
loss of anticipated profits.
The agreements and representations and warranties set forth in
Sections 1, 7(h), 7(i) and 8 hereof shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any Purchaser or
controlling person or by or on behalf of the Company, and regardless of
acceptance of any payment for the Notes hereunder, and the agreements and
representations and warranties set forth in Sections 1, 7(h), 7(i) and 8 hereof
shall remain operative and in full force and effect, regardless of termination
hereof as above provided or otherwise.
Section 10. Notices. All notices and other communications hereunder shall
be in writing or by telegram or facsimile transmission (confirmed in writing)
(or where oral notice is specified, shall be promptly confirmed in writing or by
telegram or facsimile transmission (confirmed in writing)) and if to the
Company, shall be mailed or delivered to Metropolitan Edison Company, c/o GPU
Service, Inc., 310 Madison Avenue, Morristown, New Jersey 07962, Attention: T.
G. Howson, Vice President and Treasurer or if to the Purchaser or the
Representative shall be mailed or delivered to such person at the address set
forth for the Representative in the Proposal.
Section 11. Validity and Interpretation. The validity, construction and
interpretation of this Agreement shall be governed by the laws of the State of
New York. In the event that the Proposal was made by a single person, firm or
corporation, as used herein the term "Purchaser" shall mean such single person,
firm or corporation, the term "Representative" shall mean such Purchaser, the
term "Purchasers" shall be read in the singular to mean such Purchaser, and the
provisions of this Agreement shall be deemed appropriately modified to reflect
that it is an Agreement between the Company and a single Purchaser.
Section 12. Succession. This Agreement shall inure to the benefit of the
Company, of the several Purchasers and, with respect to paragraphs (b), (c), (d)
and (e) of Section 8 hereof, of each controlling person, officer and director
referred to in said paragraphs, and their respective successors, assigns,
executors and administrators. Nothing in this Agreement is intended or shall be
construed to give any other person, firm or corporation any legal or equitable
right, remedy or claim under or in respect to this Agreement or any provision
herein contained. The terms "successors" and "assigns" as used in this Agreement
shall not include any purchaser, as such purchaser, of any of the Notes from any
of the several Purchasers.
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